Harhart says table games revenue should be for property tax relief

Monday, January 11, 2010

With threats to furlough more than 1,000 state employees, revenue being directed to the General Fund instead of property tax relief and badly needed reforms not being addressed, state Rep. Julie Harhart (R-Lehigh/Northampton) this week voted against legislation to expand the gaming industry in Pennsylvania to include table games such as black jack and roulette.

"The legislation was flawed to the point that I could not support it," said Harhart. "I was especially disappointed that the revenue generated through the expansion of gaming would not be directed to property tax relief. This was the reason gaming was introduced in the state in the first place, and with little tax relief reaching taxpayers thus far, revenues from table games should have been directed to support that goal."

Licensees approved by the Pennsylvania Gaming Control Board to operate table games would pay a one-time fee of $16.5 million while the fee for resort licensees would be $7.5 million. It would allow a resort to apply for a table games license in 2017 if all of the existing casino licenses are fulfilled and operational and there is no other casino within 30 linear miles. The legislation also stipulates that licensees would pay a state tax rate of 14 percent until June 1, 2011, and then 12 percent thereafter. This money would be paid into the state's General Fund.

In addition, 2 percent of all daily table game revenues will be directed to local initiatives. Northampton and Lehigh counties would receive funding from the local share from Sands Bethworks for economic development projects.

"The 'local share' language in the bill is of concern because the local initiatives are specially earmarked by legislative leaders and gambling supporters for select projects such as hospitals, libraries and community colleges," said Harhart. "Some say this is a permanent method to secure WAMs, or walking around money, for select regions of the state, which is one more reason why I voted no on Senate Bill 711."

Harhart noted that Senate Bill 711 was pushed through the House and Senate following pressure by Gov. Ed Rendell, who threatened to furlough more than 1,000 state employees in an attempt to plug a budget deficit that revenue from table games is expected to fill.

"Laying off 1,000 state employees would not have succeeded in filling the budget gap, and using state employees as hostages or leverage is reprehensible," said Harhart. "The bottom line is that trying to balance the state budget on such an unstable funding source is fiscally unsound, and more time should have been taken in crafting a bill that would have addressed many of the needed reforms in the industry.

"Few of the flaws in the original gaming legislation have been rectified through this bill and the industry is still undergoing investigation by a grand jury. As government officials, we have a responsibility to fix that which is broken first, and that we should do so in a transparent and honest way."